Meituan 3690

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MEITUAN-W (03690.HK) 2022 Non-IFRS Adj. NP RMB2.827B, Beating Forecast

MEITUAN-W (03690.HK) released the financial results for the year ended 31 December 2022.

The revenue swelled 22.8% YoY to RMB219.955 billion.

Over the period, the company's non-IFRS adjusted net profit hailed a YoY turnaround from the loss of RMB15.572 billion in the year ago period to reach RMB2.827 billion, beating the median of 16 brokers' estimates as compiled by our reporters (RMB2.137 billion).

LPS was RMB1.09. No dividend was declared.

The loss tapered to RMB6.686 billion from that of RMB23.538 billion in the corresponding period of the previous year, slightly ahead of the median of 18 brokers' estimates as compiled by our reporters (a loss of RMB7.084 billion).

Source: AAStocks Financial News

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ANNOUNCEMENT OF THE RESULTSvFOR THE YEAR ENDED DECEMBER 31, 2022

http://iis.aastocks.com/20230324/10643983-0.PDF

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vested

Meituan

Multiple engines for growth

Meituan’s revenue increased by 22.8% yoy to Rmb220bn in FY22 (up 21.4% yoy in 4Q22), above our expectation, due to stronger instant-delivery growth.

Adjusted NP reached Rmb2.8bn in FY22, turning from a loss in FY21 to profit in
FY22, better than our expectation, driven by reduced losses for new initiatives.

Management remains confident in its core competence in the delivery business, due
to high entry barriers. We expect food delivery and instant delivery transaction volume
to grow at 15% and 40% yoy in FY23F.

For the in-store business, Meituan will increase its marketing investment to compete
with Douyin and to maintain its market share vs. Douyin at 2:1.

In the medium term, Meituan aims for in-store and hotel revenue to grow at a 25% yoy CAGR in FY20-25F.

Reiterate Add with a higher DCF-based TP of HK$250.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... E12FAF856C

[winston]

COMPANY RESULTS BUY

Share Price HK$140.20
Target Price HK$213.00

Meituan (3690 HK)

4Q22: Solid Beat; Stronger Outlook In 1Q23; Increasing Competition With Douyin

Meituan’s 4Q22 earnings exceeded expectations.

Total revenue grew 21% yoy to Rmb60b, above our and consensus estimates.

Core local commerce profit beat expectations with adjusted EBIT rising 49% yoy to Rmb7.6b, driven by strong food delivery and an improvement in in-store operating margin.

Non-IFRS net profit was Rmb829m, vs a loss of Rmb3.9b in 4Q21, which translated to a non-GAAP net profit margin of 1.4%.

Maintain BUY with a lower target price of HK$213.00.

Source: UOBKH

https://research.uobkayhian.com/content ... 3e07cb4605

[winston]

vested

Brokers│Views

Credit Suisse│Quarterly results slightly beat; management's outlook positive

Jefferies│Projected investments amid strong recovery, already priced in

Daiwa│Profit margins beat forecast with strong in-store gross transaction revenue expected

CLSA│In-store profit margin expected to drop, but offset by higher food delivery earnings

GF Securities│Highly resilient food delivery earnings helped defend from growing competition in in-store business

Citigroup│Quarterly revenue and earnings beat

CICC│Local life services recuperated notably; investments in in-store business ramped up to solidify dominance

Goldman Sachs│Quarterly results significantly ahead of forecast

HSBC Global Research│Robust defensive line established

UBS│Estimate-beating quarterly revenue and earnings powered by faster demand recovery in December 2022

CCB International│Poised for rebound in business performance

Haitong International│Strong revenue recorded with emerging margin pressure

Nomura│Established as a key player in local life services market

China Merchants Securities│In-store business anticipated to rebound as pandemic-induced disruptions temporarily subsided

Morgan Stanley│Defensive strategies for in-store business may hamper medium-term GPM outlook

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

[winston]

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Meituan (3690 HK)
4Q22 revenue increased by 21%, earnings beat market expectations (+ve)

4Q22 Revenue grew by 21% y-o-y to Rmb60bn, with core local commerce increasing by 17%

Adjusted net profit was Rmb829m, beating market expectations of c.Rmb530m

The outperformance in earnings was driven by stronger-than-expected revenue growth and narrower-than expected loss of new businesses

TP: HK$278

https://www.dbs.com/insightsdirect/comp ... ecid=13484

[winston]

MEITUAN (3690 HK)

Recommendation : BUY
Fair Value : HKD 195.00

EXPECTATIONS RESET PROVIDE OPPORTUNITY FOR OUTPERFORMANCE GOING FORWARD .

4Q22 revenue and earnings beat, strong recovery for 1Q23
Negative impact on margins from competition, but stronger growth to offer partial offset
Lowered margin guidance provides for reset of expectations
Remain positive on Meituan’s business franchise; revise FV from HKD 252 to HKD 195

Meituan saw a strong beat for 4Q22 results, exceeding expectations on both revenue and earnings.

1Q23 outlook was also stronger than expected.

However, the lower long-term guidance on operating margin for instore business puts a dampener on an otherwise strong set of results and outlook.

While the competitive landscape is heating up, we note that Meituan remains a market leader in a rapidly expanding market and stronger than expected sales growth could partially offset lower margins due to higher sales and marketing costs.

Over the long-term, Meituan still has various levers to pull for margin expansion, such as operating leverage gains on a stable but growing food delivery business, and narrowing of losses on its new initiatives.

With Meituan guiding down on long-term earnings due to competition, we believe this provides for a reset of expectations going forward.

While we continue to be positive on Meituan on stronger growth profile going forward, we advise investors to gradually add exposure as Tencent’s distribution of Meituan’s shares was only done on 24 Mar 2023.

We tweak our FY23 estimates and revise our fair value (FV) from HKD252 to HKD195.

Source: OCBC

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Meituan Erodes 5% as Naspers Said to Transfer Meituan Shrs to Brokerage Firm

TENCENT (00700.HK)'s major shareholder Naspers, was said to have transferred 250 million shares of MEITUAN-W (03690.HK) to a brokerage firm, supposedly eyeing for an optimal timing for stake disposal.

Dented by the news, the share price of MEITUAN-W encountered resistance at 50MA and declined for the second consecutive day.

Once bottoming at $132, the stock last printed at $133.1, down 5%, rendering it the worst-performing blue-chip stock so far. The trading volume of the stock elevated slightly to 32.54 million shares.

Related News: Macquarie Cuts MEITUAN-W (03690.HK) TP to $198, Rating Outperform

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... t-news/HK6

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Meituan (3690.HK) - 1Q23 Preview: Expect In-line/Solid Q and Decent 2Q23

Outlook

We believe Meituan is likely to report 1Q23 around end-May and expect another solid quarter with revs and profit in-line to slightly ahead of expectation.

We keep our estimates unchanged and expect management to provide relatively upbeat qualitative commentary for 2Q23.

With management acknowledging competitive pressure and resetting lower for in-store margin, we believe current share price has largely priced in Douyin competition, any stronger-than-expected revs growth and better-than-feared margins trend, will likely support upside risks to estimates and share price performance.

Maintain Buy and HK$211 TP.

Putting aside overhang from competition, we believe Meituan likely to remain resilient as a proxy for offline service demand recovery play amid lack of visibility on demand rebound for
physical goods.

Source: Citi

[winston]

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MEITUAN(3690)

Analysis：

The group is mainly engaged in businesses including delivery services, in-store, and hotel and travel, new business and others.

For the three months ended December 31, 2022.

The revenue of delivery services amounted to RMB 19.77 billion, increasing 31.9% YoY.

The revenue of commission amounted to RMB 14.93 billion, increasing 12.1% YoY.

The revenue of Online marketing services amounted to RMB 7.77 billion, decreasing 5.0% YoY.

The revenue of other services and sales amounted to RMB 17.65 billion, increasing 35.4% YoY.

Cost of revenue amounted to RMB 43.2 billion, increasing 15.1% YoY.

Gross profit amounted to RMB 16.93 billion, increasing 41.3% YoY.

Gross profit margin was 28.2%, increasing 4.0 percentage points YoY.

Operating loss amounted to RMB 730 million; loss narrowed by 85.4% YoY.

Adjusted EBITDA amounted to RMB 2.96 billion, turnaround YoY.

The recovery of retail sales of consumer goods in mainland has been relatively strong since the return to normal.

Relevant data for the Golden Week in May also show that the mainland consumer market is relative active.

In terms of the group, during the Golden Week, it undertook consumer voucher activities in many place s to stimulate consumer sentiment.

According to the data, the scale of accommodation orders and dine-in consumption in many places increased sharply month-on-month.

We believe that relatively small consumption in the mainland is currently buoyant, which is conducive to the growth of the Group`s major businesses such as services, in-store, and hotel and travel.

Strategy：
Buy-in Price: $136.30, Target Price: $146.50, Cut Loss Price: $128.30

Source: Phillips